1. EMBOFFS BRIEFED INTERESTED MFA AND MINISTRY OF INDUSTRY ENERGY
OFFICIALS ON MIDDLE EAST OIL DEVELOPMENTS ON BASIS REFTEL IN-
STRUCTIONS. ITALIANS GREATLY APPRECIATED OPPORTUNITY TO EXCHANGE
INFORMATION, POINTING OUT THAT CURRENT SUPPLY SITUATION BEING
FOLLOWED CLOSELY WITHIN GOVERNMENT, UP TO AND INCLUDING PRIME
MINISTER HIMSELF.
2. RE VIENNA OPEC MEETING, MFA SOURCE SUGGESTED THEIR REPORTS
A BIT LESS PESSIMISTIC SOUNDING THAN OURS ABOUT PROSPECTS FOR
NEGOTIATIONS.ADDED THAT ITALIANS CONSIDER THE SITUATION SERIOUS
HOWEVER, IN PARTICULAR OPEC REQUEST FOR IMMEDIATE 100 PERCENT
INCREASE IN POSTED PRICE AND MINIMUM 14.4 RATION POSTED PRICE TO
MARKET PRICE. ALSO LOOK WITH CONCERN AT OPEC DESIRES FOR
INCREASINGLY SHORT TERM AS POSED TO LONG TERM AGREEMENTS--IN
CASE AT HAND, AN AGREEMENT REPORTEDLY UP TO 1975.
3. IN RESPONSE OUR QUESTIONS, MFA OFFICIAL RESPONSIBLE FOR
LIBYAN ECONOMIC MATTERS STATED HE HAS HEARD NOTHING ABOUT POSSIBLE
AGIP ENTRY INTO LIBYAN HOT OIL MARKET, ADDING THAT DOES NOT RPT
NOT NECESSARILY MEAN THAT SUCH HAS NOT OCCURRED. HE VOLUNTEERED
TO RAISE THE QUESTION WITHOUT ATTRIBUTING IT TO US IN HIS
PERIODIC CONVERSATIONS WITH ENI OFFICIALS, ALTHOUGH HE
DOES NOT NECESSARILY EXPECT A "STRAIGHT" ANSWER FROM ENI.
4. MINISTRY OF INDUSTRY SOURCE, EMPHASIZING EXTENT OF GOI
CONCERN OVER SUPPLY SITUATION, POINTED OUT THAT 22-23 PERCENT
ITALIAN CRUDE SUPPLY FIRST 6 MONTHS 1973 WAS SHIPPED FROM EASTERN
MEDITERRANEAN PORTS. HE AS DID MFA SOURCE DOUBTS THAT LOSS THIS
SUPPLY COULD BE COMPENSATED BY INCREASED LIBYAN PRODUCTION.
REGARDING GOI VIEWS ON DEMANDS MADE BY OPEC IN VIENNA, HE
STATED GOI ESTIMATES SUCH TERMS WOULD COST ITALY 1,000 BILLION
LIRE ($1.7 BILLION) ANNUALLY. FINALLY, HE MENTIONED REPORTS
OF UK CALL FOR A SPECIAL MEETING OF OECD OIL COMMITTEE TO DISCUSS
CURRENT OIL SITUATION. HE STATED THAT GOI -- AS REPORTEDLY
DO GOF AND USG-- OPPOSES SUCH A MEETING, FEELING IT WISER TO
WAIT AWHILE BECAUSE THE SITUATION IS NOT RPT NOT YET CRITICAL.
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